AGP Executive Report

Jakarta Mobility: Work has started on a 3,180-square-meter underground concourse under Bundaran HI to link the MRT station with nearby offices, hotels and malls, aiming to cut walking under the sun and boost station capacity for 450,000–500,000 monthly riders. Telecom Infrastructure: Indosat completed the carve-out of its fibre business into PT Infra Fiber Teknologi (IFT), launching an open-access wholesale platform with 86,000+ km of backbone and subsea/access networks, backed by Arsari Group in an 11.7 trillion rupiah deal. ASEAN Digital Capacity: The ASEAN-Korea HPC Facility opened in Indonesia under the KADIF program, adding regional computing capacity for AI and data-intensive research. E-commerce Tax Collection: Indonesia’s MoF will gradually expand Article 22 income tax collection to more marketplaces, with the next phase effective Aug. 1 and a 0.5% withholding for sellers above Rp500 million gross annual revenue. Energy & Agriculture: Indonesia’s B50 biodiesel rollout moves forward as Pertamina prepares for July 2026 launch, while India’s palm oil imports fell to a 14-month low, signaling softer demand that could ripple through Indonesia’s edible oil market. Security in Papua: Separatist groups again claimed responsibility for killing a US pilot and burning an aircraft in Papua, as authorities verify the status of the pilot and seven passengers.

EV Battery Supply Chain: Pure Battery Technologies plans a US$350m precursor cathode active material (pCAM) facility in Indonesia, aiming to plug a midstream gap from nickel processing to cathodes and battery cells. Energy Security at Hormuz: Pertamina says clearance for its VLCC Pertamina Pride is still ongoing before it can exit the Strait of Hormuz, with the situation described as fragile. Waste & Fire Response: BNPB is still fighting the Jatiwaringin landfill fire in Tangerang using intensified aerial water bombing alongside ground efforts after new hotspots were detected. E-commerce Workforce Reshuffle: TikTok confirms another round of Tokopedia layoffs, reorganising R&D to align engineering resources with long-term priorities, following similar cuts at Lazada and Shopee. Food Security Push: Polri partners with 12,420 MSMEs and farmer/fisher/livestock groups to build independent food production facilities and nutrition support units. Bilateral Trade Roadmap: Indonesia and Belarus launch a 2026–2030 cooperation roadmap, with a business forum pointing to US$500m in potential cooperation. Mobility Product Launch: TVS Motor launches the Callisto 110 scooter in Jakarta, targeting Indonesia’s 110cc automatic segment with fuel-saving stop-go tech. Tech Market Mood: Asia stocks slide as chipmakers tumble, with South Korea’s Kospi nearly 8% down amid AI valuation concerns.

Energy & Fuels: Pertamina cut domestic jet fuel prices by 14% from July 1, citing lower global crude, while the B50 biodiesel rollout is moving ahead as 29 of 126 fuel terminals are ready to distribute B50 and the rest will ramp up during the transition. Macroeconomy: Indonesia’s June inflation hit 3.34% yoy, driven by volatile food and global fuel costs rather than demand overheating, with core inflation staying stable. Tax & Digital Commerce: Indonesia ordered four e-commerce platforms—Tokopedia, Shopee, Lazada and Blibli—to collect income tax from sellers starting Aug. 1, with small sellers exempt if they file a letter. Infrastructure Safety: A toddler died after falling into a narrow pit at a construction site in South Jakarta, reigniting scrutiny over planning and risk management on urban projects. Industry & Investment: INA (sovereign wealth fund) is expanding into a more active “INA 2.0” strategy for 2026-30, targeting broader, more impactful investments including AI and advanced manufacturing. Regional Energy Development: Aceh wants the Andaman gas discovery to feed local downstream industry, linking it to the Arun Lhokseumawe SEZ and potential methanol and fuel processing. Trade & Markets: Indonesia reported its first trade deficit in six years as imports surged, even as DBS flagged currency pressure across several Asian markets.

Energy Transition Pressure: Indonesia’s recent blackouts in Java and Sumatra have reignited debate over a coal-dependent, centralized power system, with PLN citing constrained coal supplies and analysts urging faster shift to distributed renewables like rooftop solar. Tax & E-commerce Compliance: Indonesia will start collecting income tax via designated e-commerce platforms (Tokopedia, Shopee, Lazada, Blibli) from Aug. 1, with a 0.5% Article 22 rate on sellers’ gross turnover for eligible SMEs. Manufacturing Slump: Indonesia’s manufacturing PMI fell to 46.9 in June, signaling contraction driven by weaker demand, cost pressure, and falling new orders. Trade Snapshot: Indonesia recorded a US$4.03b trade surplus in Jan–May 2026, while May alone turned to a deficit as imports rose faster than exports. Maritime Industry Export Win: PT PAL delivered the Future Landing Dock LD-603 warship to the Philippines, using Industrial Maritime 4.0 to speed hull construction. Food Security Rollout: Polri targets 1,500 nutrition fulfillment service units (SPPGs) for the MBG free-meals program by end-2026. Inflation Watch: June inflation rose to 3.34%, the highest in three months, pressured by fuel, logistics, and a weaker rupiah.

AI Infrastructure Push: Batam is positioning itself as a Southeast Asia AI hub, with Firmus Technologies’ Nvidia-powered “DSX AI Factory” planned for up to 360 MW and start-up in Q1 2027, targeting deployment of as many as 170,000 Nvidia AI accelerator chips. Energy & Industry Rescue: Indonesia plans to take over struggling local granite tile producer Granito to prevent layoffs after industrial gas price shocks; the government also holds fixed natural gas pricing for selected industries and cuts LNG prices for non-fixed-price users. Agri Trade Expansion: Indonesia will export 120,000 tons of cocoa and 14,000 tons of crude palm oil annually to Belarus, while also pushing transmigration-area products (like blue swimming crab and durians) into overseas markets. Cybersecurity Warning: An Indonesia-based cybersecurity executive says AI will make cyberattacks more automated, targeted, and persistent, with visibility and talent shortages as key gaps. Court Case: Nadiem Makarim has been sentenced to 10 years in the Chromebook corruption case, with fines and restitution ordered. Climate & Shipping Risk: El Niño is expected to disrupt weather and shipping routes, raising operational uncertainty for regional logistics.

Jakarta Film Push: Jakarta launched a Film Commission to speed permits and promote local shooting spots, plus a “Filming in Jakarta” platform and 50% tax relief for domestic theater releases—aimed at pulling more productions into the capital. SOE Restructuring: Indonesia is dissolving 200+ underperforming state firms and plans to cut SOEs and subsidiaries from 1,000+ to about 250 by end-2026 to reduce costs and improve governance. Energy for Villages: Ampowr signed an MoU with Indonesia’s villages ministry to electrify remote areas using solar PV, battery storage and village energy software, starting with four pilot villages then scaling up. Industrial LNG Relief: Indonesia’s industry ministry said lower LNG prices should ease energy costs for manufacturers, stressing full delivery under the AGIT allocation scheme. Healthcare Localisation: Indonesia cut imported endoscope reliance from 100% to 84% in 2025, saving US$5.75m, and plans more local devices via technology transfer. Food Trade & Logistics: Indonesia proposed exporting at least 10,000 tonnes of premium rice to Singapore as Bulog storage hits capacity, while Bulog also declared 200,000 tonnes ready for export. Shipping Skills Gap: A new report warns global shipping needs ~114,000 more officers by 2030 as certified seafarer supply lags demand. AI Operations Angle: A Datadog piece argues AI competition is shifting from model quality to running systems reliably and safely at scale.

AI Infrastructure Push: Nvidia-backed Firmus plans a 170,000-GPU AI data center in Batam, with a 360MW campus and cloud services, aiming for $25bn–$30bn in committed offtake over six years. EV Battery Circularity: Indonesia is shifting from only extracting battery minerals to recycling as a core value-chain step, alongside policy reforms using a single-window clearance for investors. Energy Transition & Biofuels: Indonesia is preparing for the E20 bioethanol mandate, estimating a need for ~4 million kiloliters of ethanol annually to close refinery and import gaps. Biodiesel Market Impact: Palm prices get support ahead of Indonesia’s B50 biodiesel rollout on July 1, while El Niño risks could later pressure regional palm output. Industrial Trade Diplomacy: Indonesia will be the official partner country at Russia’s Innoprom 2026, pitching agro-food, chemicals, engineering, and industrial zones to attract investment. Food Supply Moves: Indonesia offered Singapore at least 10,000 tons of premium rice, citing strong national reserves. Creative Economy Tie-Up: Malaysia’s MyCreative Ventures highlights a commercialization-and-IP push model that Indonesia’s royalty system is often compared to.

Energy & Industry Shield: Indonesia cut industrial LNG prices to $13 per MMBtu to protect manufacturers and curb layoffs, while keeping subsidized Specific Natural Gas Price (HGBT) at $6.50–$7.00 and pipeline gas at $9.60 in Java. AI Infrastructure in Indonesia: Nvidia-backed Firmus plans a major Batam AI data centre, deploying up to 170,000 Nvidia accelerators at a 360MW campus, with operations starting in 1Q 2027 and a long-term deal running to 2034. Business Confidence: Indonesia’s economy is still “resilient,” with 5.61% Q1 growth, May inflation at 3.08%, FX reserves at $144.9bn, and a push to deregulate and streamline investment barriers. Manufacturing Jobs Focus: The government is stepping up measures to prevent wider industrial layoffs, citing cases where negotiations and labor-case settlements helped reduce disruption. Online Safety Push: A growing US-led push for stronger child online protections is gaining momentum, with parents and lawmakers pressing for tougher rules. Digital & Media Tools: Vmake Labs launched an AI video translator workflow combining translation, dubbing, voice matching, lip sync and enhancement—aimed at scaling multilingual content for creators and e-commerce teams.

AI Data Centers in Indonesia: Firmus Technologies, backed by Nvidia, will build a 360MW Nvidia DSX AI Factory in Batam, delivering 170,000 GPUs from 2027–2028 and targeting up to $30B in committed offtake deals over six years. Energy Transition Finance: The Asian Development Bank approved up to $30M equity for a Seraya Partners regional infrastructure fund to back energy transition and digital infrastructure projects across Southeast Asia, including Indonesia. El Niño Pressure on Food: Indonesia is bracing for El Niño’s moderate phase after sea-surface anomalies jumped to 1.1°C, with risks of stronger heat later—raising stakes for agriculture and supply chains. Plastics Cost Shock: Food vendors across Asia are paying more for plastic bags and containers as Middle East-driven shipping and energy disruptions tighten petrochemical supply. Maritime Security & Piracy Response: ReCAAP ISC and the Philippine Coast Guard held a senior officers meeting with Indonesian participation to strengthen port security, reporting, and joint patrols against piracy and sea robbery. Indonesia MSME Distribution Push: Indonesia is expanding village cooperatives under the KDMP program to help MSMEs reach wider markets and access lower-interest loans. Shipping Workforce Crunch: A new industry assessment warns the global shipping sector needs tens of thousands more certified officers by 2030 as fleet growth outpaces training and recruitment.

SOE Restructuring: President Prabowo says Indonesia will cut state-owned enterprises from 1,000+ to about 250–300, with closures of 750+ firms aimed at efficiency and transparency, and he reiterated the plan should be finished within two years—while officials stress it will not mean layoffs. Halal Tourism Push: Indonesia is promoting Muslim-friendly travel through the International Islamic Expo 2026 in Jakarta, bringing together tourism players, umrah/hajj agents, investors and foreign representatives to grow a halal tourism ecosystem. Academic-Policy Link: Prabowo wants regular consultations with university leaders—potentially monthly—to turn research into practical solutions, including more doctoral scholarships and higher R&D funding. Regional Growth Centers: The Transmigration Ministry’s Patriot Transmigration programme is expanding thousands of new economic growth centers across the country, targeting opportunity gaps beyond income. EV Market Shock: A report links the Iran war’s fuel disruption to faster EV adoption in developing markets, including Southeast Asia, even as charging infrastructure lags. Plastics Cost Pressure: Food vendors across Asia are facing higher plastic bag and container costs as energy disruptions tied to the Strait of Hormuz strain petrochemical supply. CPTPP Accession Talks: CPTPP members have started preparatory talks with Indonesia (along with the Philippines and UAE), signaling a path toward accession negotiations.

Agriculture Push: Indonesia’s PM-AAS “modern farming” system targets up to 12.4 tons of rice per hectare, combining jajar legowo planting, precision input use, and higher plant populations to lift yields while aiming to cut fertilizer and water costs. Energy for Industry: The Ministry of Industry backs a Draft Government Regulation on Natural Gas for Domestic Needs to lock in steadier gas supply and capped industrial pricing under the HGBT scheme, aiming to protect factory utilization and jobs. Logistics Reform: Indonesia is easing barriers and extra operational costs to attract private investment in roll-on/roll-off (RoRo) logistics, with no subsidies and a focus on faster licensing and smoother operations. Mining Decarbonization: MIND ID targets a 15.5% emissions cut by 2030 (about 2 million tons CO2e) while downstreaming ramps up energy demand. Digital Connectivity: SATRIA-1 is now providing internet to 31,803 public facilities, with schools making up about 68% of connected sites, supporting equal development in remote areas. Tourism Tech: Indonesia’s MaiA AI travel platform and the Jakarta–Bandung high-speed rail are boosting international arrivals and tourism services. Creative Economy: Indonesia’s music streaming platforms are expanding global reach for local artists, with the sector employing 27.4 million workers. Finance Watch: Analysts say the rupiah remains under pressure and could test levels past Rp18,000 per US dollar next week.

Energy & Engineering: Samsung E&A is pushing FEED work for Inpex’s Abadi gas development offshore Indonesia, with OLNG FEED alongside KBR Indonesia and Adhi Karya and a parallel FEED race for EPC; FEED is slated to finish in October and EPC awards are expected in 1H 2027. Mining Decarbonisation: MIND ID targets a 15.5% emissions cut by 2030 (about 2 million tonnes CO2e) while downstreaming doubles energy demand, warning emissions could otherwise rise to 2.1x. Urban Mobility: Jakarta’s “Donut Bridge” TOD at Sudirman Station will link six transport modes—KRL, Transjakarta, MRT, LRT Jabodebek, LRT Jakarta and the airport rail link—with completion targeted for 2028. Digital Inclusion: SATRIA-1 satellite internet is now reaching 31,803 public service sites, with schools making up 68% of connections, aiming to narrow gaps in education and health access. Trade & Regional Policy: CPTPP members have started preparatory talks for Indonesia, the Philippines and the UAE ahead of possible accession negotiations. Environment & Enforcement: A Kathmandu seminar urged stronger cross-border cooperation to curb waste trafficking, bringing together customs, police and regional partners including Indonesia. Aviation Safety: A small cargo plane crash in Papua’s Intan Jaya is under investigation as search teams work to reach three crew members.

Trade Bloc Expansion: CPTPP members agreed to start preliminary talks to add Indonesia, the Philippines and the UAE, setting out accession standards like tariff cuts and stronger IP protection. Energy Policy Shift: Indonesia begins the B50 biodiesel mandate on July 1, aiming to cut diesel imports and save foreign exchange, while the government also pushes energy transition steps to reduce oil import dependence. Shipping & Fertiliser Flows: With the Strait of Hormuz reopening after a US-Iran interim deal, fertiliser shipments (urea, sulphur and related inputs) are picking up again, though analysts warn relief will take time. Online Child Safety Enforcement: Indonesia says it has shut down about 4.7 million social media accounts run by children under 16 as platforms comply with PP TUNAS child-protection rules, using a risk-based approach. Aviation & Logistics Investment: GMR Airports took over Nagpur’s airport operations under a 30-year concession, planning phased terminal and cargo upgrades to build a regional aviation hub. Cybersecurity Watch: A new SharkLoader malware campaign is deploying Cobalt Strike Beacon, with reported targeting that includes an Indonesian diplomatic organization.

Energy & Industry Stability: Indonesia is moving LNG from central and eastern islands to Java’s industrial hubs to ease gas price spikes and protect factories from layoffs, with officials stressing exports won’t be cut. Power Supply Risk: Analysts warn Indonesia could face a deeper power crisis as coal supply mismanagement hits coal-fired plants that power most of the grid. Jobs & Layoffs: Indonesia’s DPR and the government set up a Layoff Mitigation Task Force led by the State Secretariat Minister to map industrial distress and intervene case-by-case with police labor desk monitoring. Capital Markets & FX: Indonesia is set to issue at least US$1bn in yuan-denominated panda bonds in China soon to diversify funding and reduce rupiah pressure. Mining Downstreaming: Indonesia and Switzerland signed an MoU to boost mineral and metals downstream processing cooperation. Regional Power Connectivity: Sarawak Energy is pushing the ASEAN Power Grid by strengthening the Borneo grid and exploring links to Sabah, Brunei, and a Sarawak–Singapore subsea cable. Online Child Safety: Indonesia is reviewing child-safety risk assessments from major digital platforms, including Netflix, ChatGPT, Shopee, Tokopedia, and Lazada. Trade & Finance: Indonesia’s panda bond plan and broader financing moves come as global markets stay volatile after a tech selloff.

AI Compute Deal in Indonesia: Gorilla Technology secured a $2.5bn, five-year AI compute contract, deploying GPUs at NeutraDC’s Batam data center, with 1,000 B300 servers in phase one starting September 2026. Energy & Industry Pressure: Indonesia’s fuel and power moves keep coming—Tuban’s gas plant is set to cut LPG imports, while PLN coal procurement faces demands for more transparency as Java power stability remains in focus. Digital Identity Cost Fight: Indonesian telcos are pushing to reduce or waive biometric face-matching fees for SIM verification starting July 1, warning the 3,000 rupiah charge could be passed to consumers. Haze Risk Watch: Singapore’s SIIA flags a “red alert” for severe Southeast Asia haze in the second half of 2026, driven by El Niño and deforestation linked to biofuel demand. Regional Security Drills: MALINDO, a Malaysia-Indonesia HADR exercise in Lampung, is drawing wider interest, with Japan and others watching and possible future expansion requiring both sides’ approval. Steel Standards Push: Industry groups in the Philippines urge faster enforcement of new seismic steel standards and a ban on induction furnace use for construction-grade bars. Trade Policy Signal: India says it won’t activate a US trade deal until it gets a competitive tariff edge over neighbors like Indonesia and others. Data Center Finance: Yondr and JK Land Holdings raised $715m in notes to build a 48MW data center in Virginia, adding to their broader Asia footprint.

Energy & Trade: Indonesia confirms it can increase Russian crude oil purchases, with the import contract already prepared and volumes potentially expandable, as the government also pushes to raise domestic oil lifting to cut imports. Oil & OPEC Watch: Iraq is weighing an OPEC exit or higher quota to boost output, highlighting how Middle East shipping and supply decisions keep rippling into regional energy markets. Food Security: Bapanas distributed 1.02 million tons of government rice reserves by late June to stabilize prices, while Public Works steps up El Niño mitigation via irrigation upgrades and deep-well drilling. Infrastructure Buildout: Indonesia targets 5,000 suspension bridges by end-2026 to improve connectivity for remote communities and access to schools and services. Mining Policy: The mining ministry says Indonesia hasn’t set the full 2026 nickel quota yet, with revisions subject to review. Shipping Skills Crunch: BIMCO warns the world needs over 113,000 more STCW-certified officers by 2030, underscoring a growing labor gap for maritime operations. Climate Risk for Industry: A Singapore think tank issues a severe transboundary haze warning for Aug–Sep, urging stronger Indonesia-led fire prevention ahead of El Niño-driven dry conditions.